Have you ever been late on a loan repayment? It seems
that just at the time that you need it least, banks and other
lenders slap hefty charges on your account. This is the last
thing you need, especially when you're finding it difficult to
keep up with your repayments. It's like a spiral, you're late on
a payment, so you get a late fee, then the fee makes it harder
to meet your next payment so you get another late fee, or a late
fee from one of your other accounts. Before you know it all your
money is going on late fees instead of on the payments
So how do you deal with this situation?
Well the first thing to know is that you can never be charged a
late fee for being late on repaying an existing late fee. For
example, suppose you owe $100 on a credit card. If you were late
you might incur a $20 late fee. On your next month you'll still
owe the $100 plus interest, but you'll also owe the $20 late
fee. If you only have enough for the $100 plus interest, pay
that, and tell the lender in your bill payment that it's for
your regular payment. You'll still owe the $20 late fee, but you
can't be charged a late fee for not repaying it on time.
So a piece of advice if you've got more than one account, is to
try and stay up to date on all but the late one. Don't be late
on one account this month, and another account next month. Stay
late on the same account for both months. The reason for this is
that the account you're late on can only charge you so many
fees. If you let yourself get late on different accounts, each
of them can slap you with fees.
What You Should Do If You Can't Pay On Time
If you think you're going to be late on a repayment, the best
thing you can do is call the creditor and tell them. This is a
lot better than if you simply allow the bill to go unpaid
without any explanation. Many creditors will allow you to
reschedule your payments, or give you extra time without
charging you for this. They prefer to work with you on getting
the bill paid, rather than letting the bill go unpaid and
leaving them in the dark as to your intention.
If the creditor you're going to be late on doesn't allow you to
reschedule the payments, you might want to try with another of
your creditors, and then let that one get a bit late instead.